I recently read the dragon book of compiler design. It mentions that the compiler has intermediate code generation as one of its phases which produces a machine independent code. Then why was C not developed as a platform independent language like java?
What the Dragon Book is describing is the following process:
The upside of this is that if you want to support additional systems, you just need to add a new code generator for step 3 without having to touch steps 1 and 2.
All common C compilers work this way. So if your question is "Why don't C compilers do what the Dragon Book describes?", the answer is: "They do".
Now you mentioned Java. What a Java compiler does is the following:
Now to run this byte code you need a JVM, which interprets the byte code and/or JIT-compiles it. The optimizations and analyses usually happen during JIT-compilation. This is not the process described in the Dragon Book.
From the language implementers' point of view, this doesn't change the effort of supporting a new target system very much. You no longer have to change the compiler, but instead you have to change the JVM: Instead of having to add a new backend to the javac compiler, you instead add a new backend to the JIT-compiler. The effort remains basically the same.
The major difference is for the Java programmers: Instead of compiling the program for every target platform and distributing packages for each platform, you can now compile the code once and give the resulting package to everyone. Now the people running your code need to install an JVM to be able to use the package, so you basically moved the effort from the programmer to the end user, but installing a JVM is something you need to do only once (not for every Java program you want to run).
So instead of "write once, compile everywhere", you now have "compile once, run everywhere".
So why didn't C do the same thing that Java does? Performance. Interpreting byte code is slow (compared to running compiled code) and JIT-compilation leads to increased start-up time.